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Jared Hamilton
From: Jared Hamilton
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Bryant Gibby

Bryant Gibby Used car manager

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New car inventory tool????

We currently use Vauto to manage our used car inventory and absolutely love it. To anyone who is unfamiliar, it is a program that is used to manage inventory, track turn and market day supply on every vehicle in inventory, and compares your price to every "like mine" vehicle out on the market. It is a great tool and has helped us be very successful with our used car department.

With that said, we are having some issues with our new car department and are considering making some changes. We were hoping to find a similar tool to vauto that we can use for our new car inventory. The most important criteria we are looking for is market day supply info and a price comparison function.

Is anyone aware of a company that offers a product close to what we want? I contacted vauto and they don't have anything available for new. Let me know if there is anything that you guys are aware of. Thanks!

Jim Bell
VAuto is a great tool along with a few others in the market. It definately has changed businesses over the last few years. As far as new car is concerned, there isn't any tool out there to my knowledge. The only thing close is a tool called IMS DealActivator. It will dig into your DMS/CRM and give you customers that should be in an equity position. It won't give you a stocking feature, but it will help you move some extra units. You can set it up how you want and it will figure new to used customers, used to new customers with like vehicles and moving up and give you estimated payments (retail and lease). It is tied in with national programs which is nice. We have had some success with it. You and the sales staff just have to stay on top of it.
Jordan Molstead
It is very difficult to have a tool like VAuto for new vehicles because most dealers simply put MSRP on their website and 3rd party sites for all new vehicles. You will never get a true price comparison on what dealers are actually pricing and selling their new invetory for. It would be nice to have this type of product for market day supply though on new inventory.
Dale Pollak
Bryant, Thanks for your comment and question. I would like to provide some perspective as to why we do not have vAuto for new cars. The purpose of vAuto is to assist dealers in making better decisions about what to stock, how much to pay and how to price used vehicles for the purpose of achieving higher total gross profit. To this end, we have also introduced new metrics such as market day’s supply, cost to market and price to market. As you know, these metrics have proven to be very valuable in achieving the above stated objective. So what’s the problem in doing the same for new vehicles? First, unlike used cars, you don’t have the same degree of flexibility as to what to stock. For the most part, you have to make stocking decisions within a fairly narrow band of what is offered to you by the factory. This is the case with both model and equipment configuration. Second, you do not have the ability to determine what you pay for the vehicles from the factory. Really, the only decision that you have complete control over is pricing. Unfortunately however, with respect to pricing, your margins are small and competition great. This means that there’s little incentive to price a vehicle any other way than at or below invoice. The result of these unfortunate conditions is that the usefulness of a system like vAuto and others would be very limited. Having said this, I’m always open to new thinking or approaches. If you think that certain information can be useful in achieving higher new car profits, please provide me with direction and I’ll do my best to deliver. Dale
Jared Hamilton
Think of how powerful it would be to see the market days supply of a vehicle type by option configuration in real time for what is on the ground, average turn time and what is in transit for your region matched to selling price. Thant would be AWESOME! Im not sure the manufacturers would go for it though, it would complicate rebate and build logistics and Im not sure they are prepared for that. Here is what I mean. How would you as a dealer react if you knew that blue honda accords have a 150 day supply in the market and are selling at a $1200 loss? You wouldnt buy them. But lest say the OEM had built them... they would HAVE to wholesale them somewhere. SO, in todays world, they would either have to tell that you can only get silver accords (which are turning in 22 days at MSRP - as example) if you buy the blue ones that nobody wants. OR - Option 1: They would move to a much more micro based rebate model where the blue ones got an extra incentive, say 1000 in dealers cash. Until the market supply was correct. OR - Option 2: they would restock the factory with less blue paint and more silver paint. OR - Options 3: they route the blue ones to the other side of the country where blue sells better. Today OEMs do this to a certain degree but not as well as could be done with some awesome real time technology. Also, not all the data is shared with dealers. They dont want to highlight the fact that they built too many blue ones and you are going to get stuck with them. Politics aside (the politics are not the cause of the deficiency. Its the other way around, I believe the deficiency of data creates the politics because its a coping mechanism.) this is just a TOUGH puzzle to solve. It requires lean factories, tight shipping of cars all tied to a dealers invenetory. There are lots of moving parts to this multi billion dollar problem. Someday someone will solve this puzzle, there is just lots of logistics to be considered. Im not sure the OEMs have the incentive enough to change it, the bloated inventory costs are largely shouldered by the dealers, not them. OEMs can, and do run, just in time factories. (Where they maximize part turn by bringing in the right parts just as they get installed onto the cars reducing their inventory holding time.) BUT the disconnect is that dealers cannot run just in time inventory. so the holding costs are largely dumped on the dealers in the form of flooring costs. Dealers today simply dont have the option to run just in time new car inventories. We can do a much closer job on used simply because we can buy more used cars every day. Ordering from the factory only happens every month or so. Then think about factory build out when you have you order cars sometimes 4+ months in advance! Until you can order your new cars weekly or daily, and have them built and shipped weekly/daily you will have bloated new car inventories. Dealers have to stock extra or run the risk of running out. Factories need to be better matched to dealers stock, thats the bottom line. MY VOTE: We need to encourage an industry genius to create the needed technologies and data systems (its largely a data and logistics problem) to tie the factories better to dealers inventory. Its like an enterprise vAuto for OEMs... Dale, you up for the job? I be willing to come be your assistant just so that I can learn from you! :-)
Bryant Gibby
@ Dale. I figured it was a long shot, but I thought I should ask anyway. I am well aware that new is a totally different monster than used. I was hoping there was something out there that helped with market day supply, not necessarily pricing. Thanks for the input though!

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